Bought for $250,000 last year and sold for $654,310 this year is not a bad return. Even better if you're a big believer in Ethereum and you're more than happy to be paid in ETH over USD. Owner-investor-agent Leslie Alessandra, co-founder/CEO of Defi Unlimited listed her house as an NFT in order to showcase these exciting platforms and new technologies. Also, there is a great amount of time saved in a transaction with this process.
But before we go on, what exactly is an NFT? A non-fungible token is like artwork, or your house, it's a one of a kind piece that can't be replaced with something else. NFT's live on a blockchain with unique codes and data to tell it apart from something similar. On the other hand, Bitcoin is fungible, you can trade a bitcoin for another Bitcoin. Dollar bills and gold are examples of fungible items.
NFT's have largely been thought of as digital art for sale on sites like Open Sea and typically purchased using Ethereum. Open Sea also accepts Solana (SOL), Polygon (MATIC) and Klatyn (KLAY) on their site. To some, NFT's are works of art, one of a kind that are priceless. For others, they look like worthless jpegs. Open Sea was also the platform used in a 2021 attempt to sell a home as an NFT in Thousand Oaks, CA as both real and digital property. Universal Music Group paid $360,817 to acquire Bored Ape #5537 to lead its virtual music group. Other Layer ones like Solana have opened their own marketplaces, showcasing their own set of digital collectibles. The technology is getting more popular by the day.
So how does this all play into real estate exactly? In this case of the Gulfport home, the property rights were transferred to an LLC, minted into an NFT, storing both the property rights and the rights to the company on the blockchain. A blockchain is a digital, public and decentralized ledger. From there, an auction was then held, where buyers could bid against one another in USD, with the official payment being made in ETH. Of the over 3,000 bidders who signed up, the winning bidder bought the house through their own LLC.
The transaction was brought together by San Francisco based Propy which plans to mint at least 10 more properties this year. The company helps expedite the often lengthy transaction process in selling a home with their platform. “Our interest remains in the people who actually want to live in those homes, or if they don’t, they would rent it out and definitely wouldn’t leave those homes unoccupied. CEO Natalia Karayaneva told the Tampa Bay Times.
Propy already has another listed NFT condo in Tampa, Florida, set for auction on April 7th. With more transactions , both sellers and buyers will begin to understand how to utilize these software platforms to make these deals easier by the day.